CEO Daily Brief – Feb. 18, 2011

U.S. Council on Competitiveness Releases Proposals from CEOs to Boost Manufacturing

U.S. CEOs released a report this week from the Council on Competitiveness,which outlines numerous proposals on how to ensure the United States becomes more competitive in the global economy. As President Obama considers these issues, the council’s proposals are an excellent starting point. Â

The report shows that CEOs support investments in a balanced energy portfolio, enhanced tax credits for scientific research and a greater emphasis on performance-based science, technology, engineering and mathematics (STEM) education programs.

“America’s manufacturing sector is facing unprecedented challenges that must be addressed before the country can experience a robust and widespread economic recovery,” said Council President and CEO Deborah Wince-Smith.

Industry Week says that among the specific recommendations in the report are:

Tax reform and the need for clear long-term corporate tax policies.

Make temporary R&D tax incentives permanent and expand them further.

U.S. corporate tax rates should be globally competitive.

Encourage energy efficiency and conservation, and invest in diverse energy sources such as solar, wind and nuclear.

Use U.S. assets in coal, natural gas and offshore oil.

Improve and modernize the U.S. electrical grid.

Set up a trade promotion and fast-track authority.

Ensure rights under existing trade agreements are enforced.

Create pro-business relationships with emerging-market countries.

Analyze the impact of regulations from how they will impact global competitiveness.

Lessen the cost of regulations.

Make it easier to comply with regulations.

Set up a consortium of business, university, labor and public-sector leaders to set up longer goals and set up infrastructure that leads to progress on the goals.

Empower legislation such as the America COMPETES Act, the Elementary and Secondary Education Act, Investing in Innovation, and Race to the Top and Teacher Incentive funds.

For more about the Council on Competitiveness, as reported by Industry Week, please click here.

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Top U.S. Companies Holding On To Less Cash

U.S. companies are using some of the money they have been holding onto to invest in new facilities.

According to a report from Bloomberg News, Standard & Poor’s 500 companies reduced their cash and short-term investments to $2.41 trillion from a record $2.46 trillion.

In addition, capital spending increased $22.3 billion, which is the largest quarter-to-quarter increase since the end of 2004, to $142.8 billion. That is the largest amount in two years, according to Bloomberg.

Budgets are increasing for the construction of new plants, distribution centers and stores at companies such as Cisco Systems, General Electric and Coca-Cola, Bloomberg said.

Bloomberg also reports that U.S. companies accumulated a record amount of cash in 2010 after companies reduced spending, closed factories and let go of employees in 2008 and 2009 – in the midst of the recession.

Even though President Obama encouraged U.S. companies to make such investments, Bloomberg notes that the expansion was really due to profit motives. Daniel DiMicco, CEO of Nucor Corp., told Bloomberg companies won’t invest “unless they have the opportunity to be more profitable by doing that as opposed to investing the money someplace else or holding onto it.”

In addition, the government needs to offer more incentives to encourage greater investment in new facilities – including more tax breaks for business and new trade deals with foreign countries. The moves will lead to more U.S. jobs, as well.

For more about U.S. companies’ new investment in facilities, as reported by Bloomberg Businessweek, please click here.

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Communication Important to Bring About Changes

Many times, attempts at change fail because of poor communication. Here are some tips from consultant John Baldoni about how to improve communication to employees so they become better listeners.

Informally test a proposed message with employees. Get their reactions and suggestions. Have the sharpest critics help shape the message.

Set up incentivizes to encourage employees to listen. Serve food at meetings. Give coupons or small gift cards to the first group of people who read a new message via e-mail.

Audit employees to check for results. Check if employees missed meetings. Have one-on-one meetings with them to ensure “they get the message.” See if employees have questions about changes, and ask them for feedback on communications.

Senior and middle management should daily deliver the message of changes in their informal and personal communications.

“Resistance to communication is a symptom of organizational dysfunction,” Baldoni writes in a recent Harvard Business Review blog. “It is a sign that everyone is not on board, and the sooner managers address these situations the greater likelihood they will have of solving the issues and getting people on board.”

For more about communicating change, as reported by The Harvard Business Review, please click here.

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